"We can't speak to reports from other regions," Abby Reyes, senior public relations specialist for SCEA, told Ars. She assured us that the system has broad support in the US, and that retailers are excited about both the hardware and the PlayStation Network. "With the PSP Go, retailers will have the opportunity to sell the hardware, PlayStation Network cards, and a new peripheral line," she explained.

Sony's John Koller hinted that a high margin for retailers was built into the PSP Go's $250 price tag. "We've changed the model from a margin perspective from the 3000, so there are changes throughout. We've made it very worth [retailer's] while to carry the PSP Go." He further claimed that some retailers gave Sony a standing ovation when details of the retail planned were explained.

Shelf space, digital nature adds to challenge

We caught up with Hal Halpin, the president of the Entertainment Consumers Assocation to ask about the challenges the PSP Go will face. He wrote an opinion piece addressing this very problem—albeit in a broader space—and in 1997 he founded the Interactive Entertainment Merchants Association. This is a man who knows a little something about the video games on store shelves.

His take on things: shelf space is tight. "We did see a broad increase in our share of the retail footprint at the beginning of the current hardware cycle, when three viable console systems, two popular handheld systems, and PC games all rationalized the dedication of more floor and shelf space," He told Ars. The job of the retailer is to maximize the amount of money they can make with that space, and with margins on hardware being historically tight and no money to be made on PSP Go games, the shelf space may not be well served by the hardware.

"The PSP Go is really a line extension item, not a replacement for the PSP, so it'll require more space. Add to that the complexities of retail sharing/not sharing in the subsequent digitally-distributed software sales and you can understand why retailers are taking a more objective look," he stated.

The US seems safe for Sony

Every major retailer contacted for this story said they would be stocking the system; it looks like the retail space is much friendlier towards Sony in the United States. Will retailers cool to the system once the flush from the unit's release has worn off? That's hard to tell.

At $250, the PSP Go is only $50 less expensive than the PS3, and any existing PSP customer with a roomy Pro Duo memory stick will be able to download games directly to their system, creating an all-digital platform with the system they already own, while keeping the ability to play UMD releases.

Sony has also backed off the idea of a trade-in or exchange program for consumers with a large collection of UMD games, making it a hard sell to get rid of your existing hardware to trade it up to a PSP Go. If the system isn't as big of a draw as Sony is hoping, retailers could easily give that shelf space to any number of other systems or accessories. In many ways the PSP Go is an innovative product, and being first to market with any idea is never easy.

Originally posted by Glyphon:"Sony's John Koller hinted that a high margin for retailers was built into the PSP Go's $250 price tag."

read: it's overpriced

You know, they want people to buy all the software outside of a B&M store, so why don't they just pull the hardware too and sell Online? I would imagine a $100 price drop would be easy if they did this. Oh yeah, their other consoles are in the B&M stores too.

All that said, any all-digital distribution model for a gaming system can go DIAF as far as I'm concerned. I prefer to own products I purchase with real money.

Also read: We're screwing over the people we're supposed to care about the most: Paying customers.

If Sony ran this thing at $175 and went direct to consumer, it'd probably sell quite well. As a consumer, you think I give a crap where I buy it? I want it for a reasonable price. I don't want to have been publicly, and stupidly, told that Sony had me simply hand the retailer a subsidy so their feelings didn't get hurt. Thanks Sony, you're the best. Just when you think Sony really doesn't understand how to treat prospective customers, they open their mouth and show that it's even worse than they had shown earlier.

When this flops, I hope it's a nice lesson to Sony that when you make a product no one wanted, no one asked for, and had a model that wasn't a benefit for anyone.. maybe sales won't be so good.

Originally posted by Shudder:When this flops, I hope it's a nice lesson to Sony that when you make a product no one wanted, no one asked for, and had a model that wasn't a benefit for anyone.. maybe sales won't be so good.

Considering this is Sony we're talking about, it would not surprise me if they removed the optical drive from the PS3 as well at this point.

It's going to have a tough time generally. Reviews are up at Gizmodo and Engadget, and aside from being physically smaller, there are no software improvements to speak of. It behaves exactly like a PSP-1000, but with a screen half an inch smaller.

It apparently has some incredible oversights too - if your battery craps out during a game download, you've got to start all over again.

In fairness, this will probably be dealt with; Sony are pretty good at doling out firmware upgrades.

This thing is dead in the water. Sony *still* thinks for some reason that people will come in droves to buy their products, at any price. IMHO the thing should be cheaper than the PSP, because it actually offers less functionality (ie: no UMD).

I love that bit from Sony. They act like just because a machine has similar technical specs = a direct competitor that consumers would see as nearly the same.

If it doesn't have iTunes, doesn't have apps, doesn't have an ipod built in, and isn't a touch screen interface, what exactly does the PSP think it can steal from anyone looking for those exact features? Wow, it has storage and can play games. Holy shit it's the same thing.

Meh, who cares what game retailers think, we know whay they are upset, as it cuts them out the loop. As for the high price, this is also a myth, sure it's higher than the UMB based PSP, but then it's got 16GB of flash (not cheap) Bluetooth and a better display. I have no problem with the price it's cheaper than a 16GB iPod touch, better built, better sounding and better games.

I still don't own a PSP and at this price I may never. I don't get why Sony won't subsidize the device more, considering I would certainly buy games for it. They lost sight of the "razor model," sell me the razor cheap because I'll have to buy the blades.

I believe I'm part of a larger core gamer market they are not reaching. I play games on my iPhone, DS, 360, PS3, and PC. I do not prefer electronic-distribution-only games but it is not a show stopper. That is essentially what I have in my iPhone, Steam, and Direct2Drive games. I'm not as hung up as some on the idea that I may want to play that game in 3+ years on some other piece of hardware. When I'm done with a game I move on and the used game value, resale, was/is never a driver for my purchases.

I'm from Holland, I never even heard of nedgame. I checked the source, and I believe you misinterpreted something. It says something about being a specialized retail outlet. It's not specialized in electronics, it's specialized in videogames.

after some googling:nedgame has 7 stores, which specialize in videogames.by contrast: Dixons, one of the largest electronic retailers in holland, has 170 stores.

You guys are being foolish if you think the retailers have the consumer's interests at heart.

They are just pissed that the Sony Go prevents them from making profits on sales of games, which is where they make their money (Consider how much shelf space in a Gamestop is dedicated to the games, as opposed to the consoles themselves).

I'm from Holland, I never even heard of nedgame. I checked the source, and I believe you misinterpreted something. It says something about being a specialized retail outlet. It's not specialized in electronics, it's specialized in videogames.

after some googling:nedgame has 7 stores, which specialize in videogames.by contrast: Dixons, one of the largest electronic retailers in holland, has 170 stores.

As for the reason for the high price, we actually received the story long ago via an interview with John Koller. So yes, I'm aware of it. The article notes it. Please read what is written before you rant, okay?

What's interesting is that it seems as if retailers still aren't happy with the situation.

The main issue, in my opinion, isn't even losing the ability to sell games; it's losing the ability for consumers to TRADE IN games. That's where gaming retail makes its money: the buying and selling of used games. The PSPgo will never have a used game, as the only place to buy games for the system is through Sony.

Originally posted by Glyphon:"Sony's John Koller hinted that a high margin for retailers was built into the PSP Go's $250 price tag."

read: it's overpriced

You know, they want people to buy all the software outside of a B&M store, so why don't they just pull the hardware too and sell Online? I would imagine a $100 price drop would be easy if they did this. Oh yeah, their other consoles are in the B&M stores too.

All that said, any all-digital distribution model for a gaming system can go DIAF as far as I'm concerned. I prefer to own products I purchase with real money.

I was thinking the same thing. Why not just sell the PSPgo online and since margins won't be an issue (unless Sony gets greedy) then that would mean cheaper system and maybe more customers. Retailers won't ever see a real incentive to sell the system no matter how much the margin is, because you can only sell so many systems, the real money is always in the games. For thieves...err...resellers like gamestop there is even less incentive because Sony just pulled the rug form under their feet unless customers actively stick with UMD. I have no issue with an all digital scenario, I find it far more convenient, I get to play my games instantly after purchase instead of having to go to a game store or wait until my purchase arrives. That's exactly what retailers are afraid of. All digital distribution means less people in the store possibly buying peripherals or overpriced cables. They have already lost most of that to online stores like Amazon, the pspgo steps on their toes even further.

It already has bluetooth, Wlan and other stuff... why didn't they go one step further make a smartphone out of it? Can't beat Nintendo's grasp of the handheld console market because if they try then Nintendo will just drop the price of their DS and utterly destroy them.

But smartphones... now that's another story. Take 100-150€/$ more for it (price range of blackberries, still much cheaper than iphones), give it a little bigger touchscreen, make it a phone and there you got some serious competition for the iphone.Release it for this price and without simlock (the 'without simlock' being the most important part) and they get a mighty fine share of the smartphone market.

I don’t understand why Sony thinks it’s in direct competition with Apple (iPod Touch) and not Nintendo (DS) with the PSP Go, but it appears that that is how they got their pricing scheme. And the price does make sense, if you remove the DS from the market.

I’m not sure if this is arrogance (as so many posters believe) or if it’s a major miscalculation; clearly, Apple is going after the mobile gaming market, so it would appear to be a good bet to head up against them. If you look at the facts, it (to sound like a broken record) makes sense. Apple has stated that they look at the iPod Touch as a gaming platform. Apple’s devices are similarly priced. Both companies have mobile devices that play games, movies, music, and display pictures. All arguments about features aside, the pricing fits.

As a big, fat, hairy [u]but[/u], Sony should worry also about Nintendo. Feature arguments aside, Nintendo’s offerings come at a lower cost. So I don’t get it.

Of course, you also have the element of cutting retail stores out of the software market. Even if I have a $75 margin on the device, why am I going to give it shelving space if I give up the margins on games that are sell at higher volumes? To everyone saying that Sony is screwing the customer with their price, you have to think about the B&M stores’ interests. Unfortunately, it sounds like the high margin for the PSP Go isn’t enough to keep these guys happy overseas. Sony has a balancing act here, and it looks to be falling over. Welcome to the wonderful world of download-only distribution.

To everyone saying that Sony is screwing the customer with their price, you have to think about the B&M stores’ interests.

as a consumer, i don't give a rats ass about B&M stores' interests. i just want to get the stuff as cheaply and conveniently as possible.

it's Sony that needs to consider the B&M stores' interests, but in doing so, is turning their back on the consumer interests. like was mentioned, it's a balancing act, and Sony's got one side overloaded...

The difference between iTouch and PSP is where they came from. An iPod never had a game cartridge ecosystem. They were always sold at computer stores, general electronics stores, big box stores, and even on-line. The iApps are new and have always been download only.

PSP is a game machine and has always had a strong relationship with game stores, whom they are now pissing off. If Sony wants the PSP Go to be like iTouch, they can't do it half-ass. They have to go all the way, and probably lose the game shops in the process.

Retailers will want to try this because ipod accessories have very good margins, so potentially could PSPGo. That's why Sony changed all the connectors.

But Sony can't just dip their toes in. They needed PSP2, they needed to sunset the old model. They needed touch or at least a second analog stick. But they didn't have the money to do this right, because of ps3.

I'm sure the stores are welcoming it, but that might not last long, I seem to remember rumors that they weren't too happy with the original PSP's sales a year ago.

nobody liked UMD when it came out, nobody still does, but I don't think Sony grasped the concept that they shoved it down our throats, we bought the UMDs, and now we want to still be able to use them. It's a DUHH thing for most people but I think Sony missed the boat on this, and the canceled UMD transfer program is further proof.

Can someone explain to me why this is not an issue for iPods or Zunes, or any other MP3 player? iPods are a digital only device, so why don't retailers have any issue selling those items? Is there a huge markup on iPods that retailers are more than happy to stock them?

If there is a $100 margin on this item then within a month it will be all over the internet being sold for $160 or so. Promising retailers a huge margin is virtually impossible without enforcing huge margins through product distribution, that is, punishing retailers who don't follow Sony's rules. Apple has been successful at this, maybe sony can be too, who knows.

Sony is missing the undecided market entirely with this product. When someone goes to store and is looking at systems they will probably buy a system at the same time as buying a game or two to go along with it.

If the point is to compete with Apple they should have just rebranded the psp product to avoid pissing off the owners of UMD PSPs who feel entitled to transfer their games.

Originally posted by solomonrex:Retailers will want to try this because ipod accessories have very good margins, so potentially could PSPGo. That's why Sony changed all the connectors.

But Sony can't just dip their toes in. They needed PSP2, they needed to sunset the old model. They needed touch or at least a second analog stick. But they didn't have the money to do this right, because of ps3.

I'm sure the stores are welcoming it, but that might not last long, I seem to remember rumors that they weren't too happy with the original PSP's sales a year ago.

If you think that Sony's PS3 losses would keep them from doing a proper PSP update, you're delusional. PSP R&D is a drop in the bucket for Sony's overall expenses.

The problem is that, for Sony, the PSP is still quite profitable... doesn't make sense for them to retire it just yet. With the rise of the iPod Touch, they decided they should try their hand at making a more mobile device.

Then the reality hits.

Apple doesn't have to give a rat's ass about retail for anything; they have the Apple Stores, they have their website, they have retail partners who sign contracts with them. Apple can be as capricious as they want and it doesn't really affect anyone. Sony doesn't have that luxury; piss off retailers by insinuating that the PSP, and the profit margins that go with it, might be bypassing retailers entirely, and they might have second thoughts about stocking the PSP-3000. Or the PS3. Or Sony Bravia HDTVs. Or Sony Pictures' movies. You see where this is going?

They had the right idea with the Go... just the problem with trying to take a battle to your competitor is that what's good for your competitor may not be good for you (and, in some cases, could be egregiously deleterious to you).

Originally posted by Fatbob73:Can someone explain to me why this is not an issue for iPods or Zunes, or any other MP3 player? iPods are a digital only device, so why don't retailers have any issue selling those items? Is there a huge markup on iPods that retailers are more than happy to stock them?

Because if I'm understanding this right, the article is talking about games retailers.

Which I find odd. I'm not even sure if 'games shops' even sell hardware over here - I mean, I suppose they do, but I wouldn't contemplate buying a new console from a games store any more than I'd buy an iPod from a music store, so I've not really noticed.

If I'm buying hardware I'll either buy it from an electronics retailer - who have no qualms about selling DVD players without getting a cut every time you buy a DVD - or more plausibly I'll buy it online.

Games shops are handy for browsing games and maybe making an impulse purchase if they're lucky (although I can't remember when I didn't buy a game online instead.) But there's no way I'd buy an expensive bit of hardware from the disinterested emo oiks in the nearest branch of Game.

Originally posted by whquaint:The difference between iTouch and PSP is where they came from. An iPod never had a game cartridge ecosystem. They were always sold at computer stores, general electronics stores, big box stores, and even on-line. The iApps are new and have always been download only.

PSP is a game machine and has always had a strong relationship with game stores, whom they are now pissing off. If Sony wants the PSP Go to be like iTouch, they can't do it half-ass. They have to go all the way, and probably lose the game shops in the process.

More than just that, look at what each had when they entered the digimarket. Apple had an established history with retail stores that do not thrive off of the used game market (Target/BB); a massive, high traffic, network of retail stores (Apple Store); a solid Apple operated online presense; and a market leading device to spin off of.

Sony has a relationship with those retail stores, but is also heavily invested with the video game dedicated stores (EBX/Gamestop); sonystyle stores are few and far between; the sony site doesn't gain the traffic that Apple does; the PSP is lagging behind the DS in its market.

Couple the iPhone with the touch and you have an even larger network of retailers that are willing to suffer from lack of residual game income.

I don't have an MBA, but if I were Sony, I would work on developing a discounted game purchase system for retailers (buy special deal redmption code from B/M store X, Y, and Z for $25 or otherwise $35). It would drive traffic to your retailers and would continue visibility for future consoles. It would also limit the control that Amazon would have over distribution of the Go, as it would drive in store purcahses of the device and prevent Amazon from gaining leverage to improve its margins.

Right now, Sony is offering up the Go as a gamble. If it loses, it hurts the reputation that the company will need in competing with the PS4. If it wins, it may have too many customers driven to digital distribution to hold onto shelf space with the PS4. Either way, they lose.

I don't understand where Sony is going with the Go... It's more expensive than a PSP3000 with less functionality (no UMD, i know it has bluetooth, but meh...). I bought my first PSP this summer, at the time I knew that the PSP Go was coming, but I didn't see anything in it for me to wait.

Oh and BTW I love my PSP 3000, works fine and I can buy older game for cheap on eBay...

In Denmark at least the following chains will be boycotting the PSPgo: Blockbuster (dunno how many locations, but they're huge), Fona (64 locations), Dansk Supermarket (the largest Danish retail chain, 94 relevant locations) and Coolshop.dk (online retailer).

It doesn't seem the retailers are impressed with the "huge margin", and I might add, Blockbuster might be an exception (I have no clue), none of theese places deal with used games anyway.

Why would you not purchase an iPod from any store that sells it, assuming you thrust it? For me its natural to purchase a piece of hardware from Blockbuster, or purchase a movie from a supermarket. I don't care what their main business is, as long as I all ready know what I want.